Sector Investing

[ReturntoSender]

From Briefing.com: Weekly Recap - Week ending 11-Jul-14

Dow +28.74 at 16943.81, Nasdaq +19.29 at 4415.49, S&P +2.89 at 1967.51

The stock market finished the Friday session on a modestly higher note, but the slim gains could not prevent the key indices from finishing the week in the red. The S&P 500 added 0.2%, trimming its weekly loss to 0.9%, while the Nasdaq Composite (+0.4%) finished the week with a 1.6% decline. Small caps had a tough time keeping up as the Russell 2000 shed 0.1% today to widen its weekly loss to 3.9%.

Equities slipped at the open amid weakness in two cyclical sectors. Energy (-0.8%) and financials (+0.1%) were down in excess of 0.5% in short order, while the other sectors held much closer to their flat lines.

The opening weakness in the financial sector followed an in-line quarterly report from Wells Fargo (WFC 51.49, -0.32). The stock ended lower by 0.6%, while the overall sector managed to recover its loss during the afternoon when the S&P 500 returned into the green.

Meanwhile, the energy sector was pinned to its lows throughout the session with the two top-weighted components-Chevron (CVX 128.47, -1.78) and ExxonMobil (XOM 101.74, -0.83)-pressuring the sector. The two lost 1.4% and 0.8%, respectively. In all likelihood, the sector's inability to rebound alongside the broader market was related to the daylong weakness in crude oil futures. The energy component fell 2.1% to $100.79/bbl.

Elsewhere, other cyclical sectors like consumer discretionary (+0.3%), industrials (+0.6%), and technology (+0.4%) rallied in the afternoon, which sent the S&P 500 to a fresh high.

The industrial sector drew strength from a couple of its top-weighted components. Boeing (BA 128.09, +1.30) and General Electric (GE 26.55, +0.35) posted respective gains of 1.0% and 1.3%, while the PHLX Defense Index advanced 0.7%. Transports also rallied with airlines and railroads in the lead. United Continental (UAL 45.70, +0.53) rose 1.2%, Norfolk Southern (NSC 103.95, +1.54) jumped 1.5%, while the Dow Jones Transportation Average added 0.4%.

Also of note, the relative strength of the technology sector contributed to the outperformance of the Nasdaq Composite. Google (GOOGL 586.65, +6.61) and Facebook (FB 66.34, +1.47) spiked 1.1% and 2.3%, respectively, but the top-weighted sector component-Apple (AAPL 95.22, +0.19)-surrendered the bulk of its gain into the close. On the earnings front, Infosys (INFY 54.22, -1.43) lost 2.6% despite beating earnings estimates.

Similar to the cyclical sectors, most countercyclical groups were able to finish in the green. Consumer staples (+0.1%), health care (+0.1%), and telecom services (+0.8%) posted gains, while the utilities sector (-0.7%) ended in the red.

Treasuries posted modest gains with the 10-yr note adding five ticks to send its yield lower by two basis points to 2.52%.

Participation was well below average with just 571 million shares changing hands at the NYSE floor.

Economic data was limited to the Treasury Budget for June, which posted a surplus of $70.50 billion versus a surplus of $116.50 billion in June 2013. The Treasury data are not seasonally adjusted so the June data cannot be compared with the $130.00 billion deficit from May. Fiscal year-to-date, the deficit is $365.90 billion, $144.00 billion less than the comparable period for FY13.

There is no economic data on Monday's schedule.

Week in Review: Small Caps Slide

The stock market opened the first full week of July on a cautious note with small caps pacing the retreat. The Russell 2000 and Nasdaq Composite posted respective losses of 1.7% and 0.8%, while the S&P 500 fell 0.4% with seven sectors ending in the red. Equities spent the duration of the trading day in negative territory with the opening weakness taking place amid cautious action in Europe. A disappointing Industrial Production report from Germany (-1.8% versus expected 0.2%) weighed on sentiment, which contributed to the profit-taking. Back in the U.S., profit-taking was also the theme of the day with some of the recent leaders seeing larger losses than the broader market. Specifically, the Nasdaq and Russell 2000 led the slide after entering the session with respective gains of 9.9% and 6.3% over the last three months.

On Tuesday, the major averages registered their second consecutive decline that sent the S&P 500 lower by 0.7% with nine sectors ending in the red. Small-cap stocks underperformed once again with the Russell 2000 and Nasdaq Composite posting respective losses of 1.2% and 1.4%. In many ways, the session resembled Monday's affair as stocks began the trading day on a cautious note amid weakness in European equities. On Monday, a disappointing Industrial Production report from Germany contributed to the cautious posture, while Tuesday's losses followed the largest monthly decline in UK's Industrial Production (-0.7%) since January 2013. With participants receiving another warning sign about the strength of economic growth in the eurozone, the stage was set for another day of profit taking.

The major averages snapped their two-day losing streak on Wednesday with the Nasdaq Composite leading the charge. The tech-heavy index rose 0.6%, while the S&P 500 advanced 0.5% with nine sectors posting gains. Equity indices displayed opening strength, but the early advance was a bit shaky as the Russell 2000 (+0.1%) had a tough time keeping pace with the broader market. The small-cap index underperformed throughout the session, while the other key indices powered to new highs after the Federal Reserve released the minutes from the June FOMC meeting. Most notably, the minutes revealed the belief among officials that investors have displayed too much complacency with regard to risk. Furthermore, the minutes indicated that the committee has discussed its exit strategy tools with the general expectation of a final $15 billion taper taking place in October if the current outlook holds up.

Equities stumbled on Thursday, but a daylong rebound off the opening lows helped the major averages erase the bulk of their losses. The Russell 2000 was the weakest performer, falling 1.1%, while the S&P 500 settled lower by 0.4% after being down as much as 1.0% at the open. The early stumble was not brought upon by any specific headline, but rather a series of developments that caused investors to reduce their exposure to equities. In Asia, China reported below-consensus exports (7.2% versus expected 10.6%) and imports (5.5% versus expected 5.8%), while Japan's Core Machinery Orders tumbled 19.5% against the expectations of an uptick of 0.7%. As the night continued, news from Europe caused an exodus from regional equities (mainly financials) amid worries about Portugal's banking system after the parent company of Banco Espirito Santo missed a bond payment. Portugal's PSI 20 fell 4.2%, while Germany's DAX and Spain's IBEX lost 1.5% and 2.0%, respectively. Domestically, participants received a sliver of good news on the economic front as weekly initial claims decreased to 304,000 (Briefing.com consensus 311,000); however, headlines out of the corporate world were not nearly as upbeat. Shares of Potbelly (PBPB) plunged 25.1% to a new record low after the company said it expects its revenue to come in below estimates, while also guiding for a 1.6% decline in comparable store sales.

 
 Index	   Started Week	 Ended Week   Change   % Change	  YTD % 
 DJIA	     17068.26	  16943.81   -124.45      -0.7	  2.2 
 Nasdaq	      4485.92	   4415.49    -70.43      -1.6	  5.7 
 S&P 500	1985.44	   1967.51    -17.93      -0.9	  6.4 
 Russell 2000  1208.15	   1159.93    -48.22	  -4.0	 -0.3

5:04 pm This week's biggest % gainers/losers (:SCANX) : The following are this week's top 20 percentage gainers and top 20 percentage losers, categorized by sectors (over $300 mln market cap and 100K average daily volume).

This week's top 20 % gainers

Utilities:EDN (16.43 +17.95%),TGS (3.3 +12.24%),PAM (11.45 +11.38%)
Technology:ACIW (18.36 +26.45%),GLUU (6 +13.64%),AMX (22.9 +10.52%)
Services:UAL (45.7 +14.59%),MIC (68.92 +11.88%),GOL (6.14 +10.83%)
Healthcare:BDSI (14.02 +16.93%),TXMD (4.77 +14.11%)
Financial:AMRE (22.25 +17.97%),BMA (46.02 +16.89%),BFR (13.96 +10.27%)
Consumer Goods:TRW (101.47 +11.46%)
Basic Materials:LSG (1.19 +29.35%),EXK (6.21 +13.53%),YPF (37.97 +11.22%),RIOM (2.53 +10.48%),GFI (4.05 +10.35%)

This week's top 20 % losers

Technology:GIMO (12.21 -37.67%),PT (2.49 -22.19%),VJET (19.6 -19.21%),GTAT (16.05 -17.9%)
Services:LL (54.86 -27.86%),TTS (10.98 -24.69%),PBPB (11.92 -22.6%),ACTG (15.22 -18.48%),CHUY (29.99 -17.43%),LQDT (13.06 -16.44%)
Healthcare:SRPT (21.98 -26.49%),RNA (9.89 -21.01%),ASPX (20.01 -20.66%),OMER (14.63 -19.57%),KITE (23.59 -19.05%),INSY (25.3 -18.78%),NLNK (23.01 -17.41%),FMI (24.65 -15.87%),PTLA (25.8 -15.71%)
Consumer Goods:CXDC (6.32 -23.58%)

1:22 pm Notable movers of interest (:SCANX) : The following are some of today's most notable movers of interest, categorized by market capitalization (large cap over $10 billion and mid cap between $2-10 billion) and ranked by % change (all stocks over 100K average daily volume).

Large Cap Gainers

AMZN (344.36 +5.01%): Strength following strong Channel Advisory June sales data; co also filed a petition seeking FAA approval for drone delivery
LO (65.43 +3.71%): Co confirmed it is in discussions with Reynolds American to potentially be acquired
MPC (79 +2.05%): Upgraded to Buy from Neutral at Citigroup, target lowered slightly to $94 from $96

Large Cap Losers

FAST (45.89 -4.72%): Reported Q2 EPS of $0.44 (in-line), revs rose 12.1% yoy to $949.9 mln vs $952.45 mln estimate; gross margin -140 bps yoy and -40 bps qoq at 50.8%
INFY (54.04 -2.89%): Reported Q1 EPS of INR 50.51 vs INR 46.40 estimate, revs rose 7.2% yoy to INR 127.7 bln vs INR 128.27 bln estimate; sees FY15 revs +5.6-7.6% yoy (~INR 529.4-539.4 bln) vs INR 539.21 bln estimate
RAI (60.98 -2.06%): Lower following confirmation that co is in discussions to acquire Lorillard (LO)

Mid Cap Gainers

OPK (9.09 +3.65%): Mentioned positively on CNBC by Jim Cramer
RGLD (77.9 +3.14%): Provided update on Mt. Milligan stream deliveries: wholly owned subsidiary, RGLD Gold AG received approximately 21,900 ounces of gold for the quarter ended June 30, 2014 from the Mt. Milligan mine
URS (51.68 +1.47%): Higher following report that co is exploring a potential sale

Mid Cap Losers

MTG (8.21 -11.15%): Lower following Federal Housing Finance Agency proposal to tighten requirements for private insurers for Fannie Mae and Freddie Mac counterparties; RDN also lower
PSMT (83.76 -2.84%): Beat quarterly EPS by $0.01 ($0.70 vs $0.69 estimate), revs rose 7.6% yoy to $615 mln vs $624.47 mln estimate
EAT (46.27 -2.9%): Downgraded to Hold from Buy at Wunderlich, target lowered to $52 from $56

12:48 pm Stocks/ETFs that traded to new 52 week highs/lows this session - New highs (55) outpacing new lows (41) (:SCANX) : Stocks that traded to 52 week highs: AB, ADM, AGII, AHT, AMRE, AWH, BAX, BFR, BITA, BKD, CARO, CBEY, CCE, CHE, CHTR, CRESY, CTP, EDN, ENTG, ESC, EW, GGAL, GILD, GLUU, GPRE, HAR, INTC, JLL, LEA, LO, MCBK, MGA, MO, NTT, PAM, PBCP, PEB, PPS, RGEN, RPAI, SAFM, SE, SUNE, TARO, TEO, TPX, TSM, URS, VRTS, WDC, WLB, WLDN, WRI, XL, YPF

Stocks that traded to 52 week lows: AEGR, ALLY, ARO, BAXS, BIOD, BKJ, BTH, CGA, CGG, CHCI, CNHI, CREG, CS, CTT, DRI, DRIV, FNGN, FRED, HIVE, KITE, KKD, LAYN, LIME, LPTN, MKTX, MTSL, NDLS, NILE, OSTK, PIKE, PLX, PNRA, PSMT, PT, PVH, REXX, RUBI, TROV, UDF, VII, WMAR

ETFs that traded to 52 week highs: none

ETFs that traded to 52 week lows: BAL, JJA, JJG, RJA

8:01 am Vishay to acquire Capella Microsystems, a Fabless IC Design Company (VSH) :

Co entered into an agreement to acquire Taiwan based Capella Microsystems Inc. (GreTai Securities Market: 3582) for ~NT$6,051 million or US$205 million. Capella is a fabless IC design company specializing in optoelectronic products.
Vishay intends to acquire Capella first through a tender offer of up to 100% of Capella's outstanding shares at a price of NT$139 per share.
The tender offer is conditioned upon at least a majority of the outstanding shares being tendered.
If a majority, but less than 100%, of the outstanding shares are tendered, Vishay will complete the acquisition of Capella by merger according to the Agreement and Plan of Merger executed today with Capella